Op Ed: The Convergence of High-Tech and High-Touch in Wealth Management

by JP Nicols

JP Nicols, CFP, is CEO of the advisory firm Clientific and has served in various industry leadership positions, most recently as Chief Private Banking Officer for U.S. Bank. He writes about the intersection of leadership, advice and innovation on his blog at jpnicols.com.

Disruption of long-held paradigms and business models are common themes in fintech generally, and at Finovate especially. Some of the most notable traction to date has been in the payments and personal finance space.

Now, innovative specialty lenders and crowdsourcing platforms are also breaching what had long been banks’ deepest moat — the ability to leverage and monetize their balance sheets.

Wealth management in the digital age
The wealth management business has been less commoditized, and some firms have deployed impressive intellectual capital to help clients grow, preserve and transfer their wealth. Despite the rise of digital personal finance platforms and tools, clients with higher levels of wealth and complexity need and want advice from time to time.

A recent American Banker article cited a KPMG survey that said 9 out of 10 banks were considering a major overhaul of their strategy, and 40% said that wealth management was essential to growing revenue. For good reason. Wealth management operations are typically efficient users of capital, represent lower risk business models and are higher producers of precious fee income.

It makes sense for incumbent firms to increase investment in higher-margin businesses while new entrants are left to focus on lower-cost solutions. This is the classic pattern of disruptive innovation as described by Clayton Christensen and others.

Then as these new entrants gain market share, they inevitably move upmarket. In fact, that is already happening.

From the underbanked to the overbanked
There has been considerable discussion about the unbanked and underbanked, people who either cannot or will not use traditional financial institutions. Prepaid cards, payday loans, check cashing, remittances and other services that fill the gaps have seen new innovations and new investments from both inside and outside the industry.

On the other hand, wealthier households, or the overbanked, have no shortage of providers eager for their profitable business. But disruptive forces are at play here from two areas:

  • Smaller firms which differentiate with high touch, lower client/advisor ratios, better defined market niches and more responsive service.
  • High-tech competitors with better user interfaces, more robust web and mobile tools and sophisticated analytics.

The convergence zone
The effectiveness of those two approaches varies somewhat along demographic lines, but it’s not as simple as assuming all older customers prefer high-touch while the younger set always wants a technology solution. 

Web and mobile adoption rates in older age groups rise with higher income, and affluent customers are looking for something more than a stock jockey with a briefcase full of papers.

On the flip side, even the savviest do-it-yourself millennial wants help from an expert every now and then, and simply replacing the irrelevant stock jockey with a prettier, but equally irrelevant, screen full of dials and charts isn’t enough for many.

So these powerful forces are beginning to converge in a couple of exciting ways:

  • Enterprise solutions have been gaining traction at Finovate. Past alums like InStream and Balance Financial created inviting portals for advisors to manage their business and collaborate with clients in ways previously not possible.
  • A few firms have built their own advice and back-office platforms behind compelling interfaces. Finovate alums like Wealthfront and Betterment  offer low-cost professional money management to every investor.

Three firms to watch at FinovateFall 2012
I will be paying particular attention to three firms that are contributing to the convergence of high tech and high touch at FinovateFall 2012:

  • imagePersonal Capital a Best of Show winner at FinovateSpring 2012, leverages it’s PayPal and Intuit DNA (CEO Bill Harris led those companies too) to create what  they call a "next-generation financial advisor completely personalized around you." Users can easily get started for free with their attractive and useful PFM tool, then upgrade to their money management services.
  • image MoneyDesktop is another Best of Show winner at Finovate Spring 2012 that brings a slick mobile- and tablet-friendly PFM desktop with customizable widgets as a white label solutions for FIs stuck with outdated interfaces. They recently acquired MoneyReef to further bolster their mobile PFM offerings.
  • imageActiance: Fear of running afoul of FINRA, SEC and other compliance requirements is one of the barriers in large wealth management firms’ struggle to  be relevant in social media, and significant intellectual capital too often remains in proprietary channels as a result. Actiance has been a very visible solution provider with their Socialite platform, and at Finovate they will be showing off their integration with Salesforce to further integrate social data.

I will be back after the show with my thoughts on the latest developments in wealth management and track th
e convergence through integrated offerings and enterprise solutions.

Changing the world is hard. Changing bank IT departments takes a little longer.


1. Image licensed from ShutterStock
2. For more on Personal Capital and the rise of the truly virtual financial institution, see OBR #198 (Oct 2011, subscription)

Mint Launches Mac App: Mint QuickView

imageI’ve been a big fan of apps ever since I first pressed the weather button on the iPhone in 2007. After 12 years of http://www.blahblah.com/blah.htm, it was refreshing to just press a button and get the necessary information quickly, perfectly rendered and distraction free.

So I like Mint’s latest move, putting a similar user experience onto the desktop (see note 1) with an app for the Mac (link) that provides a quick overview of balances, transactions and alerts (see email announcement below).

Once installed, Mac users simply click on the Mint icon on the top and/or bottom of their desktop, and it immediately opens to a display of the latest balance-and-transaction info. Like iPhone apps, the icon also shows the number of unread alerts on the badge (see first screenshot). 

Other novel features:

  • A search bar along the top of the transaction search
  • Optional password protection: You can choose to look at your data without logging in (after the first time)
  • Timed password protection: Users can select how long they can look at the data before the password prompt is shown  

I’ve used it for only a few minutes, but it looks like it will become my primary method of accessing Mint. Unless you need to run a report, it has most of what you need available immediately, shaving 30 to 40 seconds or more off the time to retrieve info from the full website version.  

image Bottom line: Mint is the first PFM or banking app to hit the Mac store, beating all the major financial brands to the punch. And it’s been rewarded with “featured app” status which has propelled it to the very top of the Free Apps ranking in the Mac App Store (see inset above).

Because it raises the bar in the delivery of banking info, we are bestowing it with our fourth OBR Best of the Web award for 2012 (see note 2). 


Mint QuickView app pops up after clicking on icon along the top

Mint QuickView uses dropdown from top icon on Mac

Transaction search from top line

Mint QuickView features prominent transaction search

Net income view

Mint QuickView

Email from Mint announcing Mac QuickView
(16 July 2012)


1. We wrote about moving online banking info to the PC desktop in our Online Banking Report in 2002 (subscription).
2. Since 1997, our Online Banking Report has periodically given OBR Best of the Web awards to companies that pioneer new online- or mobile-banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. If anyone knows of other financial institutions offering a similar feature, let us know and we’ll update the post. In total, 86 companies have won the award including Mint in 2007. Recent winners are profiled in the Netbanker archives.

New Online Banking Report Published: Personal Financial Management 4.0

image While personal financial management (PFM) may be THE most important feature of online/mobile banking going forward, it’s time to stop thinking of it as "product."

PFM is part of every thing you do when communicating account info to customers. The paper statement is a PFM tool. The call center offers PFM. Even the branch helps certain customers with their financial management.

But those old-school tools have limitations. They are expensive, difficult to customize, and aren’t always timely or available.

So online banking has been a boon to personal financial management. Can you imagine going back to the world where you actually had to keep track of your balance in your check register?   

But 17 years after Wells Fargo put the first customer statement online, most customers are still stuck looking at an online rendering of their circa-1960 paper statement. It’s an area ripe for disruption, and Mint.com, with 3% to 4% penetration of U.S. households, proved that users want better-looking, more functional online info.

However, unlike record stores, newspapers, and travel agents, incumbent banks and credit unions have a much better chance to stay relevant and hold on to their market share. Other than early-adopter types, few customers will entrust their money to Internet-based startups (Bank Simple may be poised to prove me wrong, we’ll see). And even if consumers have the desire, it’s often too much of a hassle to make the switch. 

As long as financial institutions stay up-to-date in online/mobile delivery, keep prices in check, and provide decent service, there are no compelling reason for customers to ever leave.

For banks, a big part of staying current is helping customers stay apprised of their financial situation, and helping them improve it. We are lumping those things together and calling it PFM. One of the biggest changes coming, thanks in part to Bank Simple making it central to their UI, is the forward-looking "balance forecast" (or Safe-to-Spend balance in Simple-speak). See last Friday’s post for more on that.

But that’s just the tip of the PFM iceberg. There are dozens of needed new features to bring online banking up to 2012 "web standards." 

In our new 54-page report we cover:

  • 23 primary PFM functions
  • 40 promising PFM features
  • Another 100 potential features
  • PFM forecast (U.S. household usage by PFM type)
  • The business case
  • Putting it all together in multiple service bundles, including fee-based premium options
  • PFM availability at the 30 largest U.S. banks and credit unions including our first look at Citibank’s Financial Tools
  • Mobile PFM
  • PFM for couples


About the report

Personal Financial Management 4.0 (link)
Moving forward with the most misunderstood financial
service of the online era

Author: Jim Bruene, Editor & Founder

Published: 25 June 2012

Length: 56 pages, 12 tables, 16,000 words

Cost: No extra charge to OBR subscribers, US$495 for others here


Sample screenshot

HelloWallet combines budget status (e.g., at "coffee shops") and a macro "left to spend" balance on its mobile view

HelloWallet "left to spend" balance

Feature Friday: Bank Balance Forecast

imageAs Simple begins the 6-month process of converting its 100,000-person wait list into paying customers, I expect much attention will be given to its flagship UI innovation, a forecast of your “free cash” after accounting for upcoming transaction. Simple has trademarked the feature as the Safe-to-Spend balance (screenshot below).

We’ve discussed it a number of times in our Online Banking Report (subscription), but we haven’t explored it in Netbanker. Here’s why balance forecasting is so important:

  • Intuitive UI: Hundreds of millions of people worldwide log in to their bank accounts at least weekly. Why? To see their balance and to make a mental calculation of whether things are on track. Whether they consciously think it or not, they are making their own calculation of what’s left in the account to spend. And given how horrible the average person is at making complex math calculations in their head, it makes so much sense to put that number right in from of them at all times.
  • Advocacy: Doesn’t everyone want to believe that the place where they entrust their live savings is looking out for their best interests? But events of the past five years have seriously eroded consumer confidence in financial institutions, especially large banks. Providing a new tool that really helps consumer understand their financial position, and reduce the chances of overdrafting, could go a long way in restoring confidence that the bank is not the enemy.
  • Gateway to advanced PFM services: Doing important calculations on the consumer’s behalf is what PFM is all about. So showing that you have the wherewithal to make this important calculation, can be the entry point for delivering more advanced PFM services, hopefully at a profitable monthly fee (note 1).
  • Great competitive weapon: Want to compete with Bank Simple? Want to show you are ahead of the curve. This is a perfect, tangible feature/benefit.

Bottom line: This is not the easiest feature to add. Maybe one of the hardest. And you should expect to spend quite a bit of time explaining it to employees and customers. But it absolutely will be part of every online banking system and third-party PFM service (see also, HelloWallet’s “left to spend below).

Simple makes it impossible to miss your “Safe-to-Spend” balance (22 June 2012)

Bank Simple "Safe to Spend" balance

HelloWallet’s mobile app has a “Left to Spend” balance for both in total and for the specific budget category (22 June 2012)



1. We are putting the finishing touches on an update of our PFM report (May 2010, subscription). You’ll see an announcement here next week.

Out of the Inbox: Mint.com Pitches Capital One Credit Card in Triggered Email Alert

imagePrecise, content-sensitive advertising is extremely powerful. It’s what made Google a giant. 

In financial services, the biggest advertising-driven success (after BankRate and Google), at least in terms of market cap, is Mint.com. Its revenue stream is entirely made up of targeted offers to customers who aggregate banking transactions on its site.

The company wisely uses email to deliver some of the advertising pitches. As we’ve discussed before, Mint is of the few financial companies directly monetizing triggered alerts.

We were impressed by the latest effort received Tuesday (see below). Having noticed that our Chase business card was used internationally, incurring a $14 transaction surcharge, they wisely pitched us a Capital One no-foreign-transaction-fee card.

Interestingly, we already have not one, but two of those Cap One cards (personal and biz) and they are both aggregated at Mint. So I’m not sure if this alert is more of a reminder to use our Cap One charge when traversing the world or that Mint doesn’t check current product usage when cross selling (or they don’t care). If Mint is only paid on performance (eg. by new accounts generated), then it doesn’t matter to Cap One that they are marketing to an existing customer.

Bottom line: The example demonstrates the marketing value of hosting the aggregated accounts.


Mint triggered alert (12 June 2012)
Note: The advertisement is two-fold. The banner with "apply now" is the most eye-catching, but also easier to ignore. There is also a text call to action above it, that looks more like alert copy. It says: "Stop paying extra to use your credit card overseas. Get a card that doesn’t charge foreign transaction fees."


Personal Financial Management for Couples

image Although, I’ve been married since Ghostbusters was in the theatres, I still (sort of) remember what it was like to have just one person’s finances to manage. If I recall correctly, it went something like this:

Money in. Money out. Then hopefully, a dollar or two leftover.

But then you get married, and even if you have separate accounts (we don’t), there is quite a bit more to it:

Money in. Discuss. Money out. Discuss. Oops, too much money out. Point fingers. Discuss a lot. Compromise. Try to do better next month.

imageAnd then you have kids and it gets even more complicated.

So why are PFMs all about the data and do little to help you collaborate about your money? Because they were mostly designed by single, urban, 20-somethings (I know that’s not entirely true, but you get the point).

What we need is the “Facebook of PFMs” where you can share appropriate financial details with your spouse, family, parents and other financial stakeholders in your life (CPA, bank, advisor, etc). The same concept extends to businesses who have even more stakeholders to communicate with.

While I haven’t seen anything that does this in the PFM space yet. There are some interesting web apps being developed that help couples sync their lives together. The first one I heard about was Pair, which has gotten quite a bit of press.

But there’s a new entry, Toronto-based SimplyUs is more of an organizational tool that a photo sharing app (note 1). Right now it focuses on calendar and todo list sharing (screenshots inset & below). That’s a great start, but an obvious next step is financial collaboration.

Bottom line: There is a large unmet need for collaboration tools linked to transaction accounts (for more info, see note 2). The opportunity is both for families and also micro and small businesses who will pay monthly fees for the service.

No tool can make financial management as simple as it was for our 23-year-old single self. But by harnessing the power of the synced mobile banking app, it should be much more manageable. 


SimplyUs iPhone app (25 May 2012)

 SimplyUs iphone app     image


1. For more info on SimplyUs, see last week’s TechCrunch post. 
2. For more info on the importance of banking the kids, see our Online Banking Report on Family Banking (July 2011). For more on financial collaboration, see Bank Transaction Alerts & Streaming (July 2010). And finally, our last PFM report is here (May 2010; subscription required for all).

Change Sciences Names PNC Virtual Wallet Best Bank PFM with Mint.com a Close Second

image Researcher Change Sciences has been doing outstanding work in financial user experience for more than a decade. In the last year alone, they’ve published deep dives in online, mobile, social media, mortgage, small business, investing, and account opening. The company counts most of the major players as customers; typical reports cost $5,000.

Its latest, published this week, contains a much-needed look at the UI of personal financial manager (PFM) services offered through major banks.

The winner? PNC Bank, which not only took top honors for its Virtual Wallet, but also claimed the number-three spot for Wealth Insight, a service geared to high-net-worth clients, launched last September. Both PNC PFMs were designed in conjunction with IDEO.

Mint.com came in a close second followed by the biggest surprise of the survey Bank Simple, which tied with USAA as the second-highest scoring bank. 

For more info, download the research fact sheet.


Overall PFM Ranking
points on Change Sciences scorecard

PFM ranking from Change Sciences
Source: Change Sciences, March 2012


1. Image from Italian band PFM <pfmpfm.it>
2. For our take on PFMs, see our May 2010 Online Banking Report.

Pageonce Adds Billpay; Showcases Multiple Mobile Apps on Single Page

image Last week, we looked at how Square makes a single webpage look great across various mobile platforms. Today, we look at the exact opposite problem. How to showcase your various mobile apps on a single webpage. 

Pageonce does it as well as we’ve seen, using a single showcase panel that includes all five of its mobile app platforms across the top: iPhone, iPad, Android, BlackBerry and Windows. Users can scroll horizontally to see two sets of screenshots for each platform.

The company also includes version number, date of the last update, and app size in the lower right corner. And of course, there’s a link to download the appropriate marketplace to download the app. The Android page uses a QR code instead of a link.

In other news, Pageonce added bill payment to its iPhone and Android app today, moving ahead of Mint in the features arm race. The new Gold service, which we haven’t tested yet, is priced at $4.99/mo, good news for fee-starved online financial providers. Mint says it has bill payment coming too. It will be interesting to see if they put a fee on it.

Relevance for Netbankers: The addition of transactional services such as bill payment makes third-party PFMs, or virtual banks such as BankSimple, bigger threats to mainstream banks and credit unions. As uber-consultant Richard Crone always says, "He who enrolls, controls."


Pageonce iPhone app

Pageonce iphone app showcased on its website


Pageonce on ipad


Pageonce on Android


Pageonce on BlackBerry


Pageonce on windows phone


Note: We cover mobile banking and payments periodically in our Online Banking Report (subscription).

ING Direct Read-Only Access Code for Third-Party PFMs

Ceramic Coffee Cup with Silicon Lid (530)To my knowledge, ING Direct is the only major U.S. bank blocking third-party PFM access. But users can direct their PFM around the gate with a special "read-only" access code.

How it works
It’s not particularly easy to find, buried three levels deep in MyAccounts | Preferences | Access Code.

The default setting is Blocked, as you can see in the first screenshot below.

But once you find the page, it couldn’t be simpler to set up. Simply press the blue Create Access Code button in the upper right, and in a split second, you have created a read-only access code and opened your account to PFM access.

To change back, you merely click the "Block" button in upper right.

The only thing missing is an explanation of what to do with the Access Code. Is it the username or password? While that’s explained in an link from the first page, it’s not on the second page where you need it. (BTW, it’s the password).

The bank also confirmed the new code via email right away (third screenshot).


Access code main page (20 Oct 2011)

ING Direct create access code page

New access code

New read-only access created at ING Direct

Email confirmation

ING Direct access code confirmation email


Note: OBR subscribers can access our previous reports on security at OnlineBankingReport.com (published in 1999, 2003, 2004, 2005, 2007 and 2008).